INDEMNITY PLAN:
 | Medical indemnity plans are those that most people think of as
traditional insurance. Indemnity plans in their original form
covered only identified losses, which were the high cost
medical events like hospitalization. As the plans evolved and
as they completed with managed care plans, the coverage expanded to
include more outpatient care and even prescription drugs. The
emphasis of indemnity plans is on covering the costs of illness and
not on promoting wellness or early detection of disease.
With indemnity plans usually the member can go to any licensed
medical provider and may self-refer to specialists. The
medical indemnity plan pays medical providers on a fee-for-service
basis and usually does not have contracts with the providers. |
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HMO/EPO:
| An EPO is a managed care plan in which members must use
participating providers (network providers) in order to receive
coverage unless they have an emergency or urgent need for care as
defined by the HMO/EPO. Each member is required to select a
primary care physician (PCP) who coordinates all care for the
member. If the member wants to see a specialist, he or she
must get a referral from the PCP.
HMOs/EPOs have very comprehensive benefits including preventative
care and prescription drug coverage. Members are covered in
full for inpatient care and pay modest co-payments for outpatient
services and prescription drugs.
When an employer is offering an HMO on a self-funded bases, it is
referred to as an Exclusive Provider Organization (EPO) plan. |
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PREFERRED PROVIDER ORGANIZATION (PPO) PLAN:
| A PPO plan has a network of providers. When the member uses
the network, most care that is covered by the plan is covered at
100% (outpatient care, ER visits, and Rx subject to member
co-pays). The member does not need to designate a Primary Care
Physician (PCP). The member does not need to get a PCP
referral in order to see a specialist. Members may choose to
go outside the network for care in which case the member will pay a
front-end deductible and then out-of-network care will be paid for
by the plan at 80% with the member paying 20% up to a specific
annual member out-of-pocket maximum. In response to escalating
costs some healthcare organizations now offer PPO products with
front-end deductible on both in-network and out-of-network services.
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